The 5 key steps in the property settlement process

Once you've found your ideal property or perfect buyer, there is one final, crucial step before the sale is official: property settlement.

Property settlement takes place when ownership is transferred from seller to buyer. Depending on your state, professionals like conveyancers, solicitors, or even sales agents can manage the settlement procedure on your behalf, but it pays to understand the settlement process when buying or selling a major asset.

Whether you’re a first-home buyer navigating the process for the first time, an investor managing multiple properties, or a seller preparing for a smooth transition, prepare yourself with an understanding of the property settlement process for a stress-free outcome.

1. The settlement date is set

The settlement process starts the day the contract is signed and concludes on ‘settlement day’ - when ownership officially changes hands. The date of this is set out in the contract - usually six weeks after contract exchange - but can vary depending on what the buyer and vendor agree to.

On settlement day, the buyer must pay the seller all outstanding costs to ‘settle’ the purchase of the property; failure to do this on time may result in interest being charged.

2. Preparing for settlement

In the lead-up to the agreed settlement date, buyers must have all their finances in place, and sellers should be ready with all legal and handover documents. A common delay in settlement is missing documents or bank errors – so be prepared!

For first-home buyers, this might mean ensuring all grants or concessions are correctly applied. Investors might need to coordinate settlements across multiple properties or prepare tenancy agreements. Sellers moving interstate or overseas should plan for the logistical aspects of relocating while ensuring all legal obligations are met.

Depending on which state the property is in, the risk of damage to the property passes from the seller to the buyer at different times. In South Australia, Tasmania, the ACT and Queensland, the buyer is responsible for any damage before settlement upon the exchange of contracts.

In New South Wales, Victoria, Western Australia, and Northern Territory, the buyer is responsible for any damage on settlement. Make sure you understand your state’s rules and organise home insurance accordingly to ensure coverage begins and ends at the correct time.

3. The buyer conducts a final inspection

In the week before settlement (or even on the same day) the buyer inspects the property to check the condition hasn’t changed since the contract signing, specifically that:

• The property is reasonably clean
• There has been no damage since the sale (water damage, cracks, pests)
• Included appliances, fixtures and fittings are in working order
• All furniture, rubbish or building materials have been removed

Keep your representative abreast of your final inspection - they can advise what to look out for and what to do immediately if you notice any problems.

4. The final payment is calculated

Before settlement, your representative will prepare a pre-settlement adjustment statement outlining the final amount to be paid, including applicable buyer concessions/grants and any bills (i.e. water/council/strata) a vendor pre-paid and any portion that should be reimbursed.

Always check this statement carefully before instructing your representative to proceed to final settlement.

5. Settlement day

Finally, the last and most exciting step of the property settlement process - settlement day!

While buyers and sellers typically don’t attend the settlement in person, your solicitor, conveyancer, or agent will handle all the nitty-gritty details. Here’s what happens:

1. The buyer’s payment is transferred to the seller’s representative.
2. The seller’s representative prepares the signed transfer documents, ensuring any third-party rights over the property, e.g. mortgages/caveats are released.
3. Transfer of ownership is officially registered.
4. Any applicable transfer/stamp duties are paid by the buyer.
5. The lender finalises the loan by releasing funds to complete the sale.
6. The buyer’s representative collects the property title, marking the official transfer of ownership.

Once complete, the buyer can collect the keys and step into their new home, and the seller can celebrate the successful and seamless transaction, with both parties ready to enter the next chapter as a proud property owner or happy seller paid in full!

No matter your situation - whether you're a first-home buyer, seasoned investor, or seller ready for a new adventure - Belle Property’s experienced team is here to guide you every step of the way.

Speak to your local Hockingstuart office today for advice and assistance, including an obligation-free appraisal of your home’s current value.

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